Credit Life and Disability

Credit Life and Disability

Credit Life And Credit Disability

Credit life/disability are types of insurance that cover consumers in the event that they can no longer make payments due to death or disability. This insurance is often offered on loans such as installment contracts where repayment will put a financial strain on the disabled individual or the decedent's family.

The options for adding credit insurance to a sale can be found under M-1-1 (Miscellaneous → 1. System Options → 1. Sales Options 1). To enable credit insurance, check the box under the optional sales fees. Once this is enabled, the option to check a second box appears to enter a flat amount that the system does not calculate.

Once credit insurance is enabled, add the insurance to a sale by selecting the appropriate rates on the sales processing screen.

If the option to enter insurance amounts manually is enabled, check the box below the insurance rates and enter the amount in the appropriate field.

The cost to the dealership for credit insurance is entered on the dealer costs tab in the sales processing screen. Select the provider of the insurance by clicking on the “Select Provider” button to the right of the insurance cost fields.

Once a sale is completed, the credit insurance income and cost to the dealership are posted to accounts 3720 (Insurance Income) and 4720 (Insurance Cost)

In Frazer, there are also options for entering rates under Miscellaneous →2) Life/Disability Rates. You should only use this option, however, if the insurance company's formulas, rates, and example calculations have been sent to Frazer for specific programming. In all other cases, rates should be entered manually.